By Dean Brown.
Good morning,
Sorry this edition is coming out a little later.
I wanted to wait until we had a better idea of what actually happened with the Canada-U.S. trade negotiations and how markets were reacting.
And we got a very eventful weekend.
The agreement Trump said existed fell apart, his 50% tariffs took effect, Canada announced retaliation and Trump has already threatened another major escalation against Canadian autos.
So instead of giving you a bunch of unrelated stories today, this edition is going to focus mostly on where the Canada-U.S. trade war now stands and what it means for Canada.
The Deal is dead. Now Escalation.
Last week, Trump said Canada and the U.S. had reached a deal and delayed the new tariffs for three days. By Friday, negotiations had collapsed. The new 50% tariffs on roughly US$20 billion of Canadian goods took effect Saturday, and Canada says it will respond with dollar-for-dollar tariffs beginning September 8.
Carney says Canada walked because some U.S. demands went too far, including:
limits on who Canada could make future trade deals with
changes touching Canadian language and cultural protections
auto demands that could encourage production to move south
broader U.S. access to Canadian markets
The U.S. tells a different story. Trade Representative Jamieson Greer says Washington had already offered Canada a workable package and Ottawa kept asking for more. We still have not seen the full draft deal, which is why I think Canadians should be allowed to see exactly what was rejected.
And the fight is already getting worse. Trump is now threatening 50% tariffs on Canadian cars, trucks and auto parts starting January 1, 2027. That could be far more damaging than the tariffs that took effect this weekend because Ontario’s auto industry is deeply tied into U.S. supply chains.
WATCH: Why Canada walked away from the U.S. deal
Why the Canadian dollar is falling
The Canadian dollar weakened as markets reacted to the failed talks.
The basic reason is simple: roughly three quarters of Canadian goods exports go to the U.S. If tariffs mean weaker exports, less investment and slower growth, investors become less interested in Canadian assets and the loonie can fall.
That matters because a weaker dollar makes imports more expensive. Electronics, machinery, clothing, U.S. travel and other goods priced in American dollars can all cost Canadians more.
In other words, the trade war can hit people who never work in manufacturing simply through higher import prices.
Your voice. Every platform. No writing required.
You ghost your own socials by Wednesday. SureThing learns your voice and ships native posts to LinkedIn, X, Instagram, and TikTok, without you writing a thing.
Why the Ambassador Bridge owner met Ottawa
Documents obtained through Access to Information show Ambassador Bridge owner Matthew Moroun privately met senior federal officials in April, about three and a half months before the Gordie Howe International Bridge opened.
The timing matters because the publicly owned Gordie Howe bridge ended the Ambassador Bridge’s near monopoly over commercial Windsor-Detroit traffic. Roughly 30% of Canada-U.S. truck trade moves through this corridor, worth more than $274 million in goods every day.
There is no evidence anything improper happened. The real question is what Moroun was asking Ottawa for, because large parts of the meeting documents remain redacted.
Ford wants Canada to hit Back harder
Doug Ford says Canada should consider using electricity and critical minerals if Washington continues escalating.
Canada does have leverage. Ontario sells electricity into U.S. states, while Canada supplies important minerals and resources used in American manufacturing, agriculture, nuclear energy and defence.
But retaliation is not free. Cutting those exports would also cost Canadian companies money and could encourage U.S. buyers to permanently find other suppliers.
My view is Canada should know exactly where its leverage is, but use it carefully. The goal should be to force serious negotiations, not damage Canadian industries just to prove we can hurt the U.S. too.
Want to go deeper? Your support helps me spend more time researching and explaining the Canadian stories that matter. The Canadian Take Plus includes Wednesday’s Member Take, the full Canada Explained investigation every Sunday, ad-free editions and special briefings when major stories break. Join for CA$7.99/month or CA$79.99/year.
A massive hydro project could overwhelm small communites
Newfoundland and Labrador is preparing for the local impact of the huge Churchill Falls and Gull Island expansion.
Communities are asking for plans around housing, roads, health care and social services before thousands of workers arrive. That concern is understandable after the problems surrounding Muskrat Falls.
These projects could create major jobs and investment, but governments need to prepare communities before construction starts, not after housing shortages and service pressures appear.
This Week’s Question
Search podcasts by meaning, not just keywords.
Run a semantic search for a thesis or sector, like "GLP-1 exposure" or "commercial real estate," and read what experts have said about it, speaker-attributed and timestamped.
Quick Things happening across Canada and beyond
🇮🇷 U.S. prepares tougher sanctions on Iran: Washington is planning broader secondary sanctions aimed at cutting Iran off from global oil and finance. For Canadians, the main concern is what this does to oil prices, gasoline and inflation.
🚗 Autos may become the biggest trade risk: Trump’s threatened 50% tariff on Canadian vehicles and parts could hit Ontario much harder than the current tariff package because the auto industry is so integrated across the border.
⚡ Electricity gives Canada leverage, but at a price: Ontario can reduce exports to U.S. states, but Canada also makes money selling that power. Any retaliation would hurt both sides.
📄 Release the rejected deal: Conservatives want Ottawa to publish the draft agreement Canada walked away from. I think that is fair. Canadians should be able to judge for themselves whether the U.S. demands were worth rejecting.
Where this goes next…
For months, the question was whether Canada and the U.S. could avoid a trade war.
That question is over.
Now we are watching how far both countries are willing to escalate before the economic cost becomes too high.
Canada probably has more to lose because we depend more heavily on U.S. trade.
But the U.S. also relies on Canadian oil, electricity, minerals, steel, aluminum and auto parts.
Both sides can cause real damage.
The question is who decides to stop first.
P.S. Do you think Canada should go further and use electricity and critical minerals, or stick mainly to tariffs and negotiations?
Hit reply and let me know.
If this breakdown helped, send it to someone trying to understand what happened over the weekend.
Dean.